Are you thinking about starting a new nonprofit? The process for doing so will look like starting a regular business in a lot of ways. But there will also be a few key differences that you will need to take full notice of. Here are the 3 best ways that you can take advantage of existing state and federal laws to start a new nonprofit.
1. Incorporate and File Your Bylaws
There are many ways to Start a Nonprofit 501(c)3. The first thing you need to keep in mind is that your nonprofit will need to be incorporated in the same way that a regular for-profit business would be. This is the first essential step you need to take to get your nonprofit off the ground.
To incorporate your nonprofit, you will need to provide three names. These will include your name, the name of the person who accepts notices on behalf of your organization, and the name of the person who will sign your official notice of forming your nonprofit. The one who accepts notices is known as your official registered agent.
The person who signs your formation notice will be known as your incorporator. Once your notice is filed, you will need to pay a filing fee of anywhere from $20 to $100. The exact amount of the filing fee will depend on the state where you are filing to incorporate your new nonprofit. Other fees may also apply.
2. Apply for Your Federal ID and Tax Exemption
Your next step should be to apply for a Federal ID. This is due to the fact that the IRS prefers to make use of ID numbers known as an Employment Identification Number (EIN). These are the numbers that the agency employs in order to identify businesses or nonprofits when they file taxes.
Before you can file your regular taxes or apply for any kind of nonprofit exemption, you will first need to obtain an official EIN. This will be the case whether or not you plan to file regular taxes or apply for federal tax exemptions. An application of this type can be completed on the official IRS website. There is no charge to file.
The most common tax-exempt status is 501(c)(3). This is a heading that includes such organizations as charities, educational foundations, and various religious groups. To apply for an exemption of this type, you will need to file a series of supporting documents. These may include articles, bylaws, and finance reports. A fee will apply.
3. Make Sure to Meet Annual Compliance Requirements
It will be up to you to make sure that your nonprofit is officially registered in a legal and timely manner. From there, it will be equally crucial to see to it that you meet all of the annual compliance requirements that state and federal laws require.
For example, if your nonprofit accepts donations or conducts fundraising operations, you will need to register as an official charity. This will be true in all but a very few states, such as Delaware. There may or not be a fee involved.
There will also be other compliance regulations to take notice of. Most states will require you to contribute an official report to update them on any major changes. This report must be filed once or twice a year. It will be crucial to keep the state authorities updated about any changes in management or contact info that may occur.
The registration of your charity is another matter that you will need to keep full track of. There are a few states where you will be expected to renew your registration on an annual basis. It’s worth looking into to see if your state is one of them.
It’s Time to Start Your Nonprofit Right
There is no time like the present to get started on filing for nonprofit tax-exempt status. It will be up to you to make sure that every detail is completed in the correct manner. Once you have done so, you can begin to function in an official manner as the head of your nonprofit. This will be the beginning of a new phase of your life.